No matter when you decide that it’s time to divorce your spouse, the transition from being a couple to being single again is a daunting one. But, getting divorced during an economic recession makes that transition more challenging.
As a result of the economic outcomes from the COVID-19 pandemic, there is an increased likelihood that we’re heading towards another recession. The unemployment rate in the U.S. has soared to 14.7%, the worst since the Great Depression. People are dealing with job loss as record numbers are applying for unemployment; 30 million Americans have filed initial unemployment claims as of the end of April. This translates into lower income or no income for millions of people for an indefinite period of time.
The cost of getting divorced in California — on average, $12,500 — $15,000 — coupled with the steps to get divorced could become financially prohibitive in this historic economic downturn. Some individuals may choose to stay in unhealthy marriages due to financial constraints.
If you’re considering whether getting a divorce during a recession is an option, you’re going to have more specific and crucial financial issues to address. And this is going to require devising a strategy for dealing with these issues.
One important consideration is how to handle investments during a divorce. The pandemic has created volatility in the stock market. For some couples, this might prove to be a big concern if you and your spouse have a large portion of your finances invested in the market. Therefore, it may be a good idea to take those shared funds out of the market and split them before the market potentially worsens.
Another issue to consider is whether you’ll be able to afford health insurance. This is especially important if children are involved. The current health insurance in the United States is getting more complicated as well as more expensive. So, Planning for health insurance coverage and costs for your children and/or you is particularly important if you’re getting divorced during a recession.
With higher unemployment rates as a result of the coronavirus outbreak and unprecedented job losses, the current benefits you’ve been receiving through your employer or your spouse’s employer may be reduced, or you may lose them all together.
And, while your children can stay on your ex-spouse’s current health insurance plan, you cannot. The good news is you may be able to temporarily keep your health insurance coverage through a law known as “COBRA” if your ex-spouse gets their insurance through an employer with 20 or more employees. COBRA allows you to stay on that plan for up to 36 months, but you’ll have to pay the premiums yourself, which can be costly.
The stress of financial problems on a marriage can lead to divorce, but financial problems when divorcing during a recession can be just as stressful, if not more so.
Recommendations from an Attorney
If you’re making the decision of whether to stay married or get divorced during a recession, it’s prudent to get divorce advice from an experienced and trusted attorney who will be able to ensure that your future after divorce is as financially stable as possible.
Buncher Family Law, Orange County divorce attorneys, handles all aspects of family law that can arise as part of a marital dissolution.